Minimum Wage Exposes Untrustworthy Legislature

by Rob Roper

On January 1st, 2018, the Vermont minimum wage rose from $10 to $10.50 an hour, one of the highest rates in the nation and about 40 percent higher than the federal minimum wage. In 2019 and each year after the Vermont minimum wage will be adjusted for inflation. This was all part of a comprehensive minimum wage law that passed in 2014 – and was supposed to be the final fix.

Business groups around the state were assured that though the wage was relatively high, the amount would be defined and predictable for the foreseeable future. The one thing employers hate more than high costs is uncertainty and the inability to accurately plan for the future. The 2014 minimum wage was supposed to end uncertainty regarding the price of labor.

Unfortunately, before the 2014 law has even been fully implemented, legislators are pulling the rug out from that bargain and are demanding a $15 minimum wage. And this won’t be the end of it.

Clarkson: Reuniting the minimum wage and whatever we decide the livable wage to be is, to me, a real priority.

Sirotkin: Whatever the gap is… we have a big gap between the minimum wage and the livable wage, and to leave the law exactly as is, we’re not going to make any progress.

And what would their ideal minimum wage be today? Somewhere around the $25 an hour mark, according to Clarkson. So, Vermont business community, get ready for one wild ride!

More damaging that the actual increased cost of moving to a $15 minimum wage is the demonstration that the Vermont legislature cannot be trusted to keep a deal. Why would anybody choose to do business in a state where you not only get the injury of exceptionally higher costs, but also the insult of being mislead about your future.

One incentive is for pushing $25 is to so $15 will seem like a compromise … and thus get one more step toward $25. Many of the jobs $15/hour is to benefit, will be automated out. The jobs that cannot be automated out, will add to trade imbalance as those products will be imported, thus never reaching even federal minimum wage, never mind what these people pretend they are trying to do.

The market cannot be out maneuvered. The pretend game does not work. Reality prevails, every time.

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